Abstract

Microsimulation studies typically assume that all entitlements to means-tested benefits are actually claimed by eligible households, despite a large body of research that suggests that take-up rates are substantially below 100%. The assumption of full take-up tends to exaggerate the simulated increase in caseloads and fiscal costs of a social policy reform. For the case of Germany, the most important means tested benefits are social assistance for employable and non-employable persons and the prioritized housing benefits and children's allowance. The projects aims at endogenizing the joint take-up decisions for these benefits in the IAB microsimulation model.